Etisalat ratings unaffected after its India plans

September 24th, 2008 - 7:07 pm ICT by IANS  

Dubai, Sep 24 (IANS) Ratings and outlook for the United Arab Emirates’ (UAE) leading telecom services provider Etisalat remained unaffected after it announced plans to enter the booming Indian market.Standard & Poor’s (S&P) said Wednesday its ratings and outlook for Etisalat stayed unaffected at “A+/Stable/A-1″.

Etisalat announced Tuesday it was buying a 45 percent stake in India’s Swan Telecom by subscribing to newly issued shares for a cash consideration of up to $900 million, implying a post-money equity value for 100 percent of the company.

India has a mobile phone network of over 250 million subscribers and adds an estimated 8-9 million users every month. The network is second biggest after China and ranks ahead of that of the US.

Swan holds universal access service licences (UASLs) in 13 telecom circles in India, and is in the process of acquiring UASLs for two more circles.

Together, these licences will enable the company to provide a full spectrum of telecom services, including GSM services, covering a population of over 900 million across India.

According to the S&P statement here, Etisalat has adequate financial flexibility at the rating level to fund the transaction, which is part of its international expansion strategy of capturing growth in rapidly expanding markets.

Pro forma for the cash payment, Etisalat’s adjusted total debt to earnings before income, taxes, deprecition and amortization (EBITDA) for the 12 months ended June 30, 2008, stood at 0.8x, it said.

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